A report from Bloomberg. "The market for mortgage-backed securities was in free fall, with fear running rampant and banks seizing collateral. That was last Saturday. In the week since, three top investors in the sector have engaged restructuring advisers, two others sold $7 billion of debt at a discount and publicly traded mortgage REITs in the U.S. lost more than $12 billion of market value, bringing total declines this year to at least $50 billion."

"The carnage shows no signs of abating. Prominent asset managers including Blackstone Group Inc., TPG and Apollo Global Management Inc. have been sucked into the vortex wrought by the coronavirus pandemic, with their associated mortgage REITs losing more than two-thirds of their value on average so far in 2020. Investors are fleeing from residential and commercial debt that isn’t backstopped by the federal government."

"In the past month, five mortgage REITs have notified investors that they’ve been unable to meet margin calls and started discussing forbearance agreements with their lenders. Other REITs have canceled, delayed or modified dividends, or liquidated riskier parts of their portfolios. While private funds also use leverage, they often have access to liquidity through capital calls, giving them more flexibility than their publicly traded peers. But they aren’t necessarily immune. Their problems may just be less apparent because of more relaxed disclosure requirements."

"'There are a lot more mortgage funds and real estate funds than mortgage REITs,' said Eric Reilly, a partner in Mayer Brown’s banking and finance group. 'There’s probably a couple of funds out there in some form of distress for every mortgage REIT you see.'"

From Mortgage News Daily. "A homeowner who qualified for a $1,075/month mortgage payment on March 5 would have qualified to purchase the average-priced U.S. home of $313,000 with 20 percent down. Less than two weeks later on March 19, MortgageNewsDaily said the rate had reached 4.15 percent. With that rate, the same homeowner would have only qualified for a $276,800 home purchase - more than a $36,000 reduction in buying power over a two-week span."

"Rates have since lowered, Mortgage News Daily put the March 23 rate at 3.44 percent, but the situation remains incredibly volatile. Many potential homebuyers are likely left wondering what their true buying power is on a daily basis, and whether that will have changed by the time an offer is accepted and they're ready to lock in their rate."

From Mortgage Professional America. "On April 1, Attom Data Solutions released its February 2020 U.S. Foreclosure Market Report. Any figures related to the housing market – or any market, for that matter – that were collected prior to the pandemic need to be taken with a U-Haul’s worth of salt. MPA: How different do you think the numbers will be in the next few months?"

"Todd Teta, CPO, Attom Data Solutions: Now we get to the part where we say everything is in flux because of the potential impact of the coronavirus pandemic. On the upside, the next few months may actually see another drop in foreclosures because banks have pledged to temporarily hold off on going after homeowners who fall behind on their mortgages. But how long that will last is unknown. Millions of people have lost jobs or work hours, which can only hurt their chances of staying current on their mortgages. At some point in the not-too-distant future, banks will move forward with foreclosure proceedings on delinquent homeowners because they will need to recoup at least some of what they've lent."

From Market Place. "As a mortgage broker in Portland, Oregon, Steph Noble usually gets calls from people trying to get a new loan or refinance an existing one. These days, she’s hearing from a lot of former clients looking for help figuring out how to delay their mortgage payments due to a job loss or reduced income. 'It’s two things: People who need immediate help, and then people who want to plan,' she said. 'They have enough to carry them through a period of time, but they’re just not sure how long this can go on for them.'"

"Under the recently passed Coronavirus Aid, Relief, and Economic Security Act, homeowners with federally backed mortgages, such as those guaranteed by Fannie Mae and Freddie Mac, the Federal Housing Administration or Department of Veterans Affairs, can pause or reduce their payments for up to a year. But Noble said some servicers are requiring a balloon payment at the end of that period. 'If you don’t have $1,500 for three months, what’s the likelihood you’re going to have, magically, $4,500 at the end of three months?' she said."

"Researchers at Black Knight Inc. looked at the correlation between unemployment and missed payments during the Great Recession. If unemployment hits 10%, director of market research Andy Walden said, 'we could be looking at roughly 2 million homeowners becoming past due on their mortgage in coming weeks.' At 30% unemployment, that projection rises to 10 million borrowers."

"Guy Cecala, publisher of Inside Mortgage Finance, said nonbanks, like Quicken and Loan Depot, now have a much bigger share of the mortgage market, accounting for more than half of originations and about a third of mortgage servicing. Mortgage servicers collect payments from borrowers and pass the money on to investors in mortgage-backed securities."

"'The nonbanks, needless to say, don’t have the same financial wherewithal that a bank does,' Cecala said. 'So they’re certainly more challenged if they have to advance payments to investors on mortgage securities, particularly if it goes more than a month or two, which seems very likely at this point.'"

From National Interest. "While the government has been proactive in protecting any borrowers, who pay their mortgage through a federal loan—i.e. a majority of mortgage holders—a large minority of mortgage holders have been left with whatever private banks are willing to offer. Some banks are offering forbearance options, similar to the government, while others are only offering reduced transaction fees on a temporary basis."

"This disparity in the reaction between policymakers and bankers has put private companies that process mortgage payments in a difficult position. Many homeowners are expecting the same relief and understanding of their difficult situation that the government is providing. Some borrowers are now declining to make payments for the duration of the crisis."

"The primary problem remains that few of the private banks have enough liquidity to withstand the widespread suspension of mortgage payments."

The La Jolla Light in California. "Jeff Tucker, an economist with Zillow, said lenders have been overwhelmed by applications, which are almost entirely driven by refinances. He said they have responded by not advertising and even raising rates. He said mortgage lenders could have raised rates either because they were trying to slow down the flow of customers or they were trying to make a loan that would actually be worth their while. 'Rather than burning the midnight oil, they began quoting higher and higher rates for all the folks rushing in the door,' he said."

"Matthew Shaver, a San Diego senior mortgage consultant with Finance of America, said the changes in rates have happened so quickly he doubts buyers could keep up. 'Rates changed so quickly that people don’t know,' he said. 'They don’t get daily reports. Media will get reports at the end of a week that says rates are at an all-time low. But, two days later they have actually gone up 1 percent.'"

"Mark Goldman, a San Diego real estate analyst and loan officer with C2 Financial Group, said closing a loan can be stressful for a lender in today’s environment. He said lenders must verify employment, but if the person is laid off after locking in a new loan, it gets canceled. Also, he said a lot of times a borrower can be counting on rental income but that can go away quickly with possible tenants losing work."

"Goldman said another concern is that mortgage servicers, companies that collect monthly mortgage payments, still have to pay investors even if borrowers are granted forbearance on loans. The Mortgage Bankers Association has written a letter, according to CNBC, to the Federal Reserve chairman requesting relief for servicers who could go bankrupt if too many Americans aren’t making payments."

The Review Journal in Nevada. "When Las Vegas’ real estate market crashed more than a decade ago, job losses soared, and lenders foreclosed on homes all over the valley. Today, the economy is in crisis again because of the coronavirus pandemic — but foreclosures are on pause, stopping what could have been an avalanche of repos. Despite the intervention, Las Vegas’ housing market is not in the clear. It’s still unknown how long businesses will remain closed, how fast they will staff up when the virus is no longer a threat and how many employers end up shuttered for good because of the outbreak."

"So far, the fallout from the virus has been swift. Around 71,940 initial unemployment insurance claims were filed statewide in the week ending March 28, second-highest in Nevada history behind the prior week’s record of nearly 92,300, according to the Nevada Department of Employment, Training and Rehabilitation. Before the outbreak, the weekly record was 8,945 claims in January 2009 after the housing market crashed."

"We will find out soon enough whether the outbreak’s aftershocks spark a foreclosure crisis in Las Vegas. But the valley does not want a repeat of the dark days from a decade or so ago when masses of homes emptied after the housing bubble burst, enabling a widespread squatter problem even as the market rebounded in later years."